Early in vertebrate embryonic development, cell-cell signaling plays important roles. We are interested in the mechanistic understanding of Wnt and hedgehog signaling pathways in the control of vertebrate embryonic development, in particular, limb development and skeletal morphogeneis. Early in limb development, signaling molecules which include the Wnt and hedgehog family members determines where and when the late structures, ie, skeletal elements will form. Skeletal morphogeneis in the limb occurs through endochondral bone formation in which chondrocytes (they form the cartilage) and osteoblasts (they secrete bone matrix) are first differentiated from mesenchymal condensations. This is followed by sequential proliferation and maturation of both chondrocytes and osteoblasts, which are tightly regulated and coordinated to ensure proper morphogenesis of the skeletal system. Through analyzing mutant mice in which Wnt signaling components are either inactivated or ectopically expressed, we have found that Wnt5a, in contrast to many other Wnts, signal through a novel pathway to antagonize the canonic Wnt pathway in regulating embryonic development and possibly in suppressing tumor formation.In addition, we have found that several Wnt genes are expressed in overlapping and complementary patterns in the developing synovial joints, where ?-catenin protein levels and transcription activity were up-regulated. Removal of ?-catenin early in mesenchymal progenitor cells promoted chondrocyte differentiation and blocked the activity of Wnt14 in joint formation. Ectopic expression of an activated form of ?-catenin or Wnt14 in early differentiating chondrocytes induced ectopic joint formation defined by morphology and gene expression profile. In contrast, genetic removal of ?-catenin in chondrocytes led to joint fusion. These results demonstrate that the Wnt/ ?-catenin signaling pathway is both necessary and sufficient to induce early steps of synovial joint formation.